Fair Work Ombudsman v Ansa Finance Pty Ltd

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FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA

(DIVISION 2)

Fair Work Ombudsman v Ansa Finance Pty Ltd [2024] FedCFamC2G 160

File number: MLG 1564 of 2022
Judgment of: JUDGE FORBES
Date of judgment: 27 February 2024
Catchwords: FAIR WORK –failure to comply with compliance notice – where default judgment had been entered -  civil penalties – relevance of similar prior conduct – relevance of employer’s conduct after contravention – whether cooperation real - serious contravention warrants penalties
Legislation:

Crimes Act 2009 (Cth) s 4AA

Fair Work Act 2009 (Cth) s 90, 99, 539, 545, 546, 547, 550, 716

Cases cited:

Australian Building and Construction Commissioner v Pattinson [2022] HCA 13

Fair Work Ombudsman v ANSA Finance Pty Ltd [2022] FedCFamC2G 833

Fair Work Ombudsman v ANSA Finance Pty Ltd (No 2) [2024] FedCFamC2G 95

Fair Work Ombudsman v C &G Smith Enterprises [2023] FedCFamC2G 523

Division: Division 2 General Federal Law
Number of paragraphs: 88
Date of hearing: 3 July 2023
Place: Melbourne
Solicitor for the Applicant: HWL Ebsworth Lawyers
Respondents: In person

ORDERS

MLG 1564 of 2022

FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN:

FAIR WORK OMBUDSMAN

Applicant
AND:

ANSA FINANCE PTY LTD (ACN 138 153 296)

First Respondent

JOSHUA FUOCO

Second Respondent

ORDER MADE BY:

JUDGE FORBES

DATE OF ORDER:

27 FEBRUARY 2024

THE COURT ORDERS THAT:

1.Pursuant to section 546(1) of the Fair Work Act 2009 (Cth):

(a)the First Respondent pay a pecuniary penalty of $24,975 to the Commonwealth for the contravention declared in Order 1 of the Orders made in these proceedings on 5 April 2023 (April Orders); and

(b)the Second Respondent pay a pecuniary penalty of $4,995 to the Commonwealth for the contravention declared in Order 2 of the April Orders.

2.Each of the First Respondent and the Second Respondent pay the penalties prescribed by Order 1 to the consolidated revenue of the Commonwealth within 28 days of the date of these orders.

3.The Applicant has liberty to apply on seven days’ notice in the event that any of the preceding orders are not complied with.

Note: The form of the order is subject to the entry in the Court’s records.

Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).

REASONS FOR JUDGMENT

JUDGE FORBES

INTRODUCTION

  1. The Fair Work Ombudsman (the Ombudsman) seeks the imposition of penalties against the first respondent, Ansa Finance Pty Ltd (ACN 138 153 296) (Ansa Finance), and its company secretary and manager Mr Joshua Fuoco (Mr Fuoco) in respect of the first respondent’s failure to comply with a compliance notice issued on 4 February 2022 (the Compliance Notice) pursuant to section 716(2) of…

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Details
Case
[2024] FedCFamC2G 160
Decision Date

CaseChat Overview and Summary

In the case of Fair Work Ombudsman v Ansa Finance Pty Ltd, the Fair Work Ombudsman sought to enforce compliance with a compliance notice and sought penalties against Ansa Finance and its manager, Mr Fuoco, for underpaying an employee, Ms Malik. The matter proceeded in the absence of the respondents, who had cited personal medical issues for their non-appearance. The key issues before the court were whether the respondents had genuinely attempted to comply with the compliance notice, the extent of the contraventions, and the appropriate level of penalties considering the respondents' conduct and the seriousness of the contraventions.

The court found that Ansa Finance had failed to comply with the compliance notice and had underpaid Ms Malik by not paying her the applicable minimum wage, accrued annual leave, and base rate of pay for personal leave. The court noted that Mr Fuoco had acknowledged the underpayment but did not take any meaningful action to rectify it. The court also found that the respondents engaged in a deliberate pattern of delay, obfuscation, and feigned cooperation, which undermined the enforcement process and warranted increased penalties. The court held that the respondents' conduct, including their failure to comply with court orders and their ongoing non-compliance in related proceedings, indicated a need for both general and specific deterrence.

The court ultimately decided that the contraventions were serious enough to warrant significant penalties. Considering the aggravating factors, including the respondents' lack of genuine cooperation and their repeated non-compliance with legal obligations, the court imposed penalties on both Ansa Finance and Mr Fuoco. The exact amounts of the penalties were not detailed in the provided text, but the court's decision emphasized the importance of compliance with employment laws and the consequences of failing to do so.

Orders

Orders of the court

Full text does not contain this section.

Background

Background to the litigation

On the morning of the penalty hearing, the second respondent emailed my chambers attaching a medical certificate which stated he was suffering from a medical condition and would require time off work for the next three months. Accordingly, there was no appearance at the penalty hearing on behalf of the first or second respondent. For reasons explained later, the Court proceeded to hear the application.BACKGROUND The background to this application has been informed by the pleadings, the affidavits which have been filed by the Ombudsman and the Ombudsman’s written submissions. The background advanced by the Ombudsman has not been contested in a substantive way. The respondents have been afforded an opportunity to contest this litigation, including being afforded an opportunity to file submissions and affidavit evidence on the question of penalty. Apart from filing an affidavit which purports to respond to the statement of claim, the respondents have chosen not to engage. Ansa Finance was at all relevant times the operator of a finance broking business with a principal place of business located in Toorak, Victoria and registered offices in Hawthorn and Richmond at different times. At all relevant times, Mr Fuoco was employed as the manager of Ansa Finance and was responsible for the operation and control of the business. Employees of Ansa Finance were entitled to be paid wages and work in accordance with the terms contained in the Banking, Finance and Insurance Award 2020 (the Award). According to the statement of claim filed by the Ombudsman, Ms Sonakshi Malik was employed by Ansa Finance on a full-time basis between 15 July 2021 and 30 November 2021 (the employment period). Ms Malik took personal leave from 21 September 2021 and resigned from her employment on 30 November 2021. An application for assistance was received by the Ombudsman from Ms Malik in December 2021[5], not long after her resignation. That request prompted an investigation which was conducted by Fair Work Inspector (FWI) Tran between 24 and 29 January 2022.[5] Not 2020 as deposed by FWI Tran at [6] of her affidavit During her investigation, FWI Tran corresponded with Mr Fuoco. On 29 January 2022, FWI Tran received an email from Mr Fuoco in which, inter alia, he conceded that there was an underpayment in respect of Ms Malik that would need adjusting. He accepted that Ms Malik had not been paid annual leave on termination of her employment. Mr Fuoco also stated that he would gather information in order to assess the calculation of Ms Malik’s entitlements and would “present a proposal solution” in a week’s time[6]. Mr Fuoco also requested the Ombudsman to “forward me any material that FWO had in response to the Omnicron variant of CV-19 and its impact on SMEs”.[6] Affidavit of FWI Tran affirmed on 29 May 2023, Annexure LTT-1 As a result of this correspondence and other information obtained during the course of her investigation, Ms Tran formed a reasonable belief that Ansa Finance had contravened: (1)clause 15.1 of the Award; and (2)sections 90(2) and 99 and the FW Act by failing to pay Ms Malik: (a)the applicable minimum wage during the employment period;(b)her accrued and untaken annual leave, and the annual leave loading when her employment ended; and (c)her base rate of pay for her ordinary hours of work during periods of personal leave between 21 September 2021 and 30 November 2021.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The Ombudsman also reminded the Court that the financial loss to the former employee does not represent the full extent of the loss consequential on the respondent’s non-compliance with the Compliance Notice. As I explained in the First Ansa Finance Penalties Decision, the damage caused by non-compliance includes, among other things, the erosion of public confidence in the statutory enforcement framework and the direct costs of unnecessary litigation. Delay, obfuscation and lack of cooperation The Ombudsman submitted that the respondents had engaged in a deliberate pattern of conduct which was aimed at frustrating the investigation process and Court proceedings, including by subjecting the Ombudsman to cost and inconvenience and the Court to wasted resources, all with a view to avoiding or delaying the inevitable consequence of its contravention. The Ombudsman pointed to numerous communications between Mr Fuoco and FWI Tran, including demands by Mr Fuoco that the investigation be referred to a higher level of management within the Ombudsman. It was submitted that Mr Fuoco sought the involvement of more senior management as a means of delaying the investigation and in the hope that the respondents’ non-compliance would meet with a different result. The Ombudsman points to the fact that Ms Tran’s supervisor, Mr Marsh, simply reinforced and reiterated the Ombudsman’s position. The Ombudsman also referred to the respondents’ “on-again-off-again” participation in the Court proceedings. The respondents have consented to orders for the filing of documents but then failed to comply. The respondents have attended some directions hearings but not others. At one point the respondents were legally represented, albeit very briefly, and subsequently the respondents were not. The Ombudsman says that when viewed in totality, the respondents have sought to give the appearance of cooperation but never had any intention of doing so. For example, the Ombudsman also points to Mr Fuoco’s offer to rectify the contravention by making repayments in instalments. The Ombudsman noted that Mr Fuoco’s offer was conditional on the Ombudsman agreeing to withdraw the proceedings and that when the Ombudsman refused to do so, Mr Fuoco took no further action to make repayments. It is submitted that the refusal to rectify the contravention without a quid pro quo deal from the Ombudsman shows the respondents’ lack of appreciation of the broader public policy considerations inherent in enforcement proceedings. The Ombudsman submits that the established pattern of obfuscation, delay and feigned cooperation, not only disentitles the respondents to a discount for mitigation, but should be seen as aggravating conduct which warrants particular sanction. The Ombudsman submits that when viewed as a whole, taking into account the respondents’ failure to comply with Court orders in this proceeding and their ongoing failure to comply with Court orders to rectify contraventions in related court proceedings, there is a compelling case for general and, in particular, specific deterrence.